Restoring Not Destroying Communities

  • Election 24
  • Living standards and Levelling up

Professor Anne Power, LSE Housing 

In this piece, Professor Anne Power, LSE Housing, discusses the urgent challenges the UK’s housing system faces and potential solutions for addressing them.

There are many rundown areas all over the country that cry out for investment and regeneration. We have an old leaky housing stock, alongside thousands of multistorey flats that encourage damp and mould, surrounded by often neglected “left-over” spaces.

About 20 million of our 27 million homes need careful insulation if we are to succeed in reducing our carbon emissions. Our private rented stock is generally in very poor condition compared with social housing. Nearly 20 million homes are owner-occupied, and many are very energy inefficient. Homes in the worst condition are concentrated in poorer areas, with decayed environments.

Some argue that it is cheaper and more efficient to simply replace our defective housing stock and our run-down areas. But to do this involves large-scale demolition, which is slow, damaging, and costly. Past experience tells us that demolition blights whole neighbourhoods, far beyond the immediate demolition sites. The impact on local services and community relations is extremely negative. The dirt, noise, particulate pollution from demolition and added traffic, all make the area unliveable over many years. It takes at least 10-15 years to demolish and rebuild an area, and demolition affects whole streets and blocks. This means that sound, occupied homes are lost alongside poor-quality homes. The most significant consequences are the loss of community and the destruction of embodied energy in the demolished buildings. Demolition should be avoided at all costs, and replaced with upgrading, for social, environmental, and organisational reasons.

Alongside poor housing conditions, we face a housing shortage in many parts of the country. The seemingly obvious answer is to build more homes on available land, where necessary in the green belt, as urban extensions. But this hits up against several problems. The embodied energy that goes into new homes gobbles up many of the gains made over many years from building better insulated new homes requiring minimum energy use. When homes are built on the edge of towns or cities, they generate traffic and greatly increase flood risk by reducing the absorbency of land. New building has a major impact on biodiversity, driving vegetation, insect, bird and animal life further out into shrinking natural space. Finally, building new homes overrides the pressing problems of existing communities. Simply spreading outwards does not rescue communities.

We, therefore, need to explore alternative ways of creating more homes, in the areas that most need them, in ways that do not destroy or weaken communities, and preserve the existing stock. Experiments are underway that show how even the most difficult multistorey blocks of flats can be renovated to the highest energy efficiency standards for less than the cost of demolition and replacement.

A potential source of extra housing space is under-occupation, particularly among older households in the owner-occupied sector. There are 43 million spare bedrooms over and above those needed by the occupying households. Several factors drive under-occupation. Household size has shrunk from an average of six people before World War II, to an average of two today. There are fewer children per family; later partnering and childbearing; an ageing population of “empty nesters”; longer life expectancy; and rapid growth in one-person households. Much of our housing stock simply has surplus bedrooms.

A large driver of under-occupation is the tax treatment of owner occupying: the more space there is in your principal home, the more capital you gain. Since we have no capital gains tax on people’s homes, people regard housing as a form of saving. Council Tax is charged, not on the current value of homes, but on their value in 1993, when property values were far lower. Council Tax does not rise in proportion to the size of a property, nor does it reflect its relative value. A two-bed council maisonette may have to pay similar Council Tax as that of a large house of five times its value and three times its size. Council tax therefore creates little incentive to downsize. Add that to people’s reluctance to uproot as they get older and the shortage of smaller, attractive homes to downsize to, and the reasons for over-occupying become clear.

Some practical measures would help. Increasing council tax by adding higher tax bands above the current A rating, as has already been trialled in Wales; uprating current property values; giving people direct help in downsizing, such as grants; reducing or abolishing stamp duty, which has to be paid when a house is bought and sold, thereby deterring moving; providing attractive, smaller homes in areas where people want to live and near existing networks. One very unpopular government incentive to encourage downsizing was the Bedroom Tax, imposed exclusively on under-occupying social housing tenants. It proved hard to make work due to a lack of suitable alternatives, and it was very unfair.

One way to help both supply and downsizing is infill building. According to a capacity study in London, the most densely built-up city in the country, there are countless small sites of half an acre, that could each produce around 6-12 homes. There are also multiple larger sites, not officially counted, which could add up to 50 homes each. There is a constant flow of infill sites as uses change, but many are simply left unused. Councils, housing associations, and small- and medium-sized builders could use these sites for small development. Accelerating infill building could tackle chronic housing shortages, replace green field building, and restore the liveability of our towns. The use of infill sites densifies thinned out urban areas, and upgrades neighbourhood environments. It also makes public transport more viable.

Many housing problems would be helped by more subsidised social renting and more secure, affordable private renting. Rented social housing, subsidised by the government, charging rents that are generally far lower than private market rents, offers security and, overall, far better conditions. Social landlords can also contribute to private renting on this basis.

Stopping demolition of all social housing and improving existing homes is vastly cheaper than building new. Creating an even playing field between renting and owner occupation would also reduce the cost of renting. Restricting the Right to Buy by modifying discounts and legally requiring the return of ex-council property to social landlords when it is sold, as happens in Ireland, would also increase low-cost supply.

To succeed, housing policy must take account of radically different housing markets in different regions. Large parts of the country have a surplus of housing, where deindustrialisation has driven depopulation, where private rents are as low as social rents, and where owner-occupation is affordable for people on moderate incomes. The legacy of industrial decline makes incomes and opportunities far lower in those regions. The UK’s high regional inequality makes redistributing housing demand far more difficult.

We can restore communities by prioritising upgrading and infill building over demolition, supporting downsizing and reinvesting in the lowest income areas, and running neighbourhoods with care with people on the ground to keep conditions under control. Above all, given the direct threat posed by climate change, we need to prioritise conservation, avoid sprawl building, secure maximum energy efficiency at all levels, and create more liveable, less car-bound, more sociable cities, towns and communities.

About the author

Anne Power is Emeritus Professor of Social Policy at the London School of Economics and Head of LSE Housing and Communities, a research group based within the Centre for Analysis of Social Exclusion. Anne’s most recent publication is Cities for a Small Continent: International Handbook of City Recovery, which was published by Policy Press in May 2016. Parallel to this book was the production and publication of seven City Reports regarding recovery of the ex-industrial European cities of Sheffield, Belfast, Torino, Bilbao, Leipzig, Lille and Saint-Etienne.

Image credit: Brett Jordan, Unsplash